Seniors to get transitional relief until Medicare plan starts

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SAN FRANCISCO (CBS.MW) -- As lawmakers wrangle over a Medicare prescription-drug benefit that would likely not start until 2006, senior citizens may start to receive drug discounts as early as January of next year.

A new card, meant to bridge the gap until Medicare covers prescription drugs, would come with a one-time enrollment fee for most seniors and discounts of 10 percent to 25 percent off the cost of their pharmaceuticals, according to the two versions of the bill.

"They provide only the potential for some relief, but it is modest," she said. "It will take a little bit of the edge off, but not much."

Uninsured seniors who pay full price for their drugs may see some savings with the Medicare card, but many people already take advantage of savings cards put out by pharmaceutical manufacturers such as Pfizer and Eli Lilly and drug store chains such as CVS
CVS,
+2.73%
and Rite Aid
RAD,
-0.21%,
said Tricia Neuman, vice president and director of Medicare policy work for the Kaiser Family Foundation.

"For those who already have a discount card or who go to a discount retail place like Costco for their prescriptions, they may find they're not significantly helped by the proposal," Neuman said, noting that the cards fall short of what a Medicare drug benefit would offer.

What the transitional cards will do

To receive Medicare's endorsement, card sponsors would be have to meet specific requirements, such as publishing discounted prices, offering both retail and mail-order delivery options, and providing information on how to prevent drug interactions.

In the Senate version, the government would waive the annual fee, to be capped at $25, for low-income seniors. Those enrollees would receive an annual subsidy of $500 or $600, depending on which version of the proposal goes through. Other details such as how the cards would be implemented remain sketchy as the House and Senate work out their differences.

The transitional Medicare drug program might make use of the increasingly popular discount cards circulating in the private sector, Neuman said.

"It's something the administration could implement relatively quickly, because these things already exist, as a stepping stone to implement a broader Medicare benefit."

The discount cards that many companies and drugstore chains offer function like the preferred shopper cards at grocery stores. Eligible seniors receive the benefit immediately at the cash register instead of having to submit forms for reimbursement.

But unlike the transitional Medicare drug card being proposed, the cards now on the market mostly cover drugs from one manufacturer instead of multiple companies' products.

Despite their cost advantages, discount drug cards tend to be difficult to compare and inconsistent in their eligibility requirements, Neuman said, noting a recent Kaiser study.

"Savings varied from card to card and drug to drug, making comparisons extremely difficult," she said. "We also found they presented discount information in inconsistent ways. Some would say 12 percent off retail. Another would say $10 off."

About 38 percent of Medicare beneficiaries lacked prescription drug coverage in 1999, the last year data was available, she said. Americans 65 and older are spending an average $999 out of pocket for prescription drugs this year.

Where the discount drug cards are

The programs cover more than 1,400 medicines, association spokesman Jeff Trewhitt said. "With some of these programs, you can make $40,000 a year," he said, noting that some patients with chronic illnesses find relief as well. "In some cases, you can qualify and get free medication."

Here are some of the discount drug cards now on the market:

1. Together Rx, a consortium of seven drug companies including Johnson and Johnson
JNJ,
+0.38%,
Bristol Meyers Squibb
BMY,
+0.72%
and Novartis
NVS,
+0.90%,
offers price breaks on more than 170 brand-name prescription drugs. There is no annual fee, and it's open to Medicare beneficiaries with no public or private coverage who earn less than 300 percent of the federal poverty level, which is $28,000 for individuals and $38,000 for couples, executive director Robert W. Perkins said.

About 840,000 cardholders are enrolled in the one-year-old TogetherRx program, and they've saved more than $115 million, he said. Savings are typically 20 percent to 40 percent. In addition, the program has an agreement with several large drugstore chains such as Rite Aid and Eckerd to give cardholders 15 percent to 30 percent off generic drugs filled in their stores, Perkins said. The approval process, which contains five basic questions, takes about seven to 10 days.

2. Pfizer for Living Share Card. This program is for Medicare recipients at 200 percent of the federal poverty level, where gross income is less than $18,000 a year for singles and $24,000 for couples. Eligible seniors pay a $15 flat fee for a 30-day supply of any of the Pfizer
PFE,
-0.05%
drugs in the program, which include Lipitor, Zoloft, Detrol and Viagra. There is no annual fee, and about 340,000 enrollees are signed up. Seniors need to send a copy of their Medicare card and 2002 tax returns to apply, which they can do online or by calling toll free: 800-459-4156.

3. Lilly Answers Card. Similar to Pfizer, Eli Lilly
LLY,
-0.99%
offers its cardholders Lilly medications for a flat $12 for a 30-day prescription. Income limits are $18,000 for individuals and $24,000 for couples. An estimated 5 million Americans are eligible, and low-income seniors who lack coverage can call 1-877-795-4559 for more information.

4. GlaxoSmithKline Orange Card. This program is for uninsured seniors and disabled people enrolled in Medicare with annual incomes below $30,000 for singles and $40,000 for couples. The card offers an average savings of 30 percent to 40 percent per prescription. Drugs covered include Augmentin, Wellbutrin and Zantac.

5. AdvancePCS RxSavings Card. Unlike other programs, The AdvancePCS
ADVP
plan is not just for seniors. It has no age or income restrictions. It's designed for those who don't have coverage or are underinsured. It has no membership fee and is accepted at most pharmacies. The card offers an average savings of 20 percent, plus manufacturer discounts of an additional 5 percent to 10 percent on 24 commonly prescribed medications. Discounted drugs include Accupril for hypertension, Novolin for diabetes and Mircette oral contraceptives.

6. AARP MembeRx program, AARP Prescription Savings Service. AARP has two plans: MembeRx Choice is for anyone 50 and older who joins AARP, while its Prescription Savings Service is for people who use its Health Care Options plan to supplement Medicare. Both boast average savings of 19 percent per prescription. Enrollment is $15 annually for MembeRx plus the cost of AARP membership. The programs also offer discounts on over-the-counter medications, vitamins and medical supplies.

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About the Author

Kristen Gerencher

Kristen Gerencher writes about health care for MarketWatch. Previously, she wrote the Vital Signs column and Health Matters blog for MarketWatch. She won two awards from the Society of Professional Journalists for explanatory and feature writing. Gerencher previously worked for ABC-7 News in San Francisco and has a graduate degree from the University of California, Berkeley.

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